Is there a future for the Community Infrastructure Levy?

The recent announcement by Planning Minister, Nick Bowles MP, unveiling direct cash incentives of up to 25% of the Community Infrastructure Levy (CIL) pot for those communities accepting development in their areas, has been met with mixed opinion and re-opened discussion about the benefits of CIL.

It was the Barker Review of Housing Supply back in 2004 that made significant criticism of the S106 mechanism for securing planning contributions. After the failure to implement an initial recommendation for a tax on increased land values resulting from the grant of planning permission, an alternative proposal for a Community Infrastructure Levy, to be administered and collected by Local Authorities was later introduced.

The basic principle behind CIL is for a more objective mechanism of setting planning contributions associated with development proposals, enabling Local Authorities to better plan for the provision of identified essential infrastructure across their whole Authority area. Supporters of CIL believe it will provide developers with greater certainty on development obligations and should reduce excessive timescales and legal costs incurred through the negotiation of section 106 agreements. However detractors believe that the removal of negotiation and flexibility from the process, particularly in a tougher economic climate, will stifle development if there can be no flexibility on contributions.

Ahead of attending a private briefing by Nick Boles, MP, planning consultant Amanda Olley, Director of Summit Planning Associates, spoke to Property Aspects about what the recent announcement may mean for the future of the community infrastructure levy or CIL:

“It is still too early to tell if Community Infrastructure Levy will improve upon the criticisms levied at the S106 mechanism for securing planning gain and speed up the provision of essential infrastructure across Local Authority areas. To date, only a handful of Authorities have adopted charging schedules allowing them to make collections from qualifying developments.

The continuing stagnant state of the economy is also still only seeing a slow release of new development proposals coming forward. If up to 25% of a CIL pot secured from a qualifying development is to be diverted into the local community pocket, it is difficult to see how, in the continuing economic climate, Local Authorities are going to be left with a sizeable enough pot to implement the provision of their identified essential infrastructure needs in a timely manner.”

She continued: ”The recent announcement may also discourage additional Authorities from proceeding to the adoption of CIL charging schedules, if rates have to be set prohibitively high to offset a 25% diversion to local communities. This may result in a greater retention of the Section 106 mechanism than had previously been anticipated, if Local Authorities perceive this to be a better way of retaining monies collected from planning obligations.”

Amanda Olley has been a Chartered Town Planner for 12 years and is an expert in her field. For more information, contact Summit Planning Associates via Tel: 01625 801800 or E-Mail: amandaolley@summitassociates.co.uk